By Frederick Kiel, Staff Reporter
This story appears in the July 13 print edition of Transport Topics.
The European Union last week imposed tariffs on biodiesel imported from the United States to counter low prices it said were caused by subsidies, but a spokesman for the U.S. Trade Representative denied subsidies were the main reason for the growth of U.S. sales in Europe and that the United States would review the tariffs “closely.”
The EU decided July 7 to impose tariffs of as high as $333 a metric ton for five years to counter what it said was a surge of subsidized imports that injured European producers.
A spokeswoman for the Office of the United States Trade Representative agreed that U.S. law gives subsidies whether biodiesel is used domestically or exported, but she denied that subsidies were a prime factor in the growth of U.S. exports to Europe.
“We do not accept the characterization that U.S. biodiesel exports to Europe were produced via subsidies,” USTR spokeswoman Ne-feterius Akeli McPherson told Transport Topics. “It is true that certain U.S. federal benefits are provided in respect of biofuels, the same as certain governmental benefits are provided in respect of biofuels in the European Community, in order to foster these industries based on the shared policy interests of the United States and Europe.”
McPherson said the United States “will be reviewing the EU’s decision to impose definitive duties closely. Should any aspects of this investigation raise concerns under [World Trade Organization] rules, we will consider further action at the appropriate time.”
The decision sets in place for five years provisional tariffs im-posed in March; they will take effect by July 13.
U.S. imports had risen to take 20% of the European biodiesel market by 2007, but fell to zero after the EU imposed the temporary tariffs, Amandine Lacourt, spokeswoman for the European Biodiesel Board, told TT.
In the United States, trucks use biodiesel, which can be produced from vegetable oils or animals fats, in blends that typically are 5% biodiesel and 95% petroleum, although blends of as much as 20% biodiesel are available.
The EU has mandated that 10% of all diesel sold by 2020 must be biodiesel, which makes Europe an attractive market, Lacourt said.
The U.S.-based National Biodiesel Board called the decision “unfortunate.”
“The decision to ignore these fundamental facts has yielded a protectionist result that is detrimental to all parties involved,” NBB stated. “Moving forward, the U.S. biodiesel industry will certainly reserve our right and ability to further address this flawed outcome.”
“Throughout this case, we have constantly put data on the record that clearly shows the European biodiesel industry was not being harmed by U.S. competition,” NBB said. “In fact, some EU companies have fared quite well. For those that have not, it is factors unrelated to U.S. competition — bad business models, high feedstock costs and detrimental EU member state policy — that are to blame.”
Lacourt disputed NBB’s statement.
“What you have to bear in mind to understand this case is that in 2007 and 2008, U.S.-produced biodiesel, even with the cost of ocean freight factored in, sold here from $150 to a $200 discount per metric ton [2,205 pounds], compared with our product,” Lacourt said.
“U.S. exports went from zero percent of the European market in 2005 to 20% by 2007, and those exports constituted 80% of entire American biodiesel production,” Lacourt added. “U.S. law makes no exception for subsidies whether the product is meant for domestic consumption or for export, and that is why we asked the EU for damages and tariffs.”
“We believe it’s important for countries to encourage the use of biofuels, but the subsidies should apply only for domestic use,” Lacourt said.
